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ZkSync (ZK) Falls 20% During Binance Listing

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ZkSync, an Ethereum zero-knowledge Layer 2 scaling solution, has been garnering attention for its new token. Last week, the project announced an airdrop of the ZK token, sparking backlash from investors and the crypto community.

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Following the backlash, crypto exchange Binance announced it would list ZK and offer a new distribution program to address user concerns. ZK has fallen by more than 20% since its listing.

ZkSync’s Airdrop Drama

June 11, ZK Nation Announced Upcoming release and airdrop of zkSync tokens: On Monday, 695,000 eligible addresses could claim over 3.6 billion ZK tokens.

However, the distribution left many long-time users unhappy with the token allocations they received. Several investors expressed disappointment that they received a lower allocation than users with lower trading volume and volume. Other customers said they were not eligible for the airdrop despite meeting the criteria.

Likewise, various top-tier projects built on zkSync announced they were forming a coalition after not being included in the airdrop. Element and zkApes revealed that they had not received any tokens despite generating up to $20 million in gas fees for the network.

The backlash intensified when users expressed concerns about the lack of anti-Sybil filtering. The project stated in its airdrop announcement that it decided not to use anti-Sybil standards. The ZkSync team explained that it considered it to be an “incomplete approach.”

Online Report Claim 80 million ZK tokens will be distributed across 47,000 Sybil addresses.

Over the weekend, ZK Nation addressed the criticism and user concerns. The team answered Excluding projects built with zkSync, user entitlements, Sybil detection, and more are some of the most frequently asked questions.

According to the post, the team chose a “different path” to benefit organic users. As explained, aggressive Sybil filtering would weed out “naive Sybils” while falsely flagging real users. Additionally, filtering would miss most bots and professional Sybil accounts.

As a result, Sybil detection for airdrops was set to “reduce the false positive rate,” with the team explaining that “an increased number of Sybil accounts passing the filter” was an “intentional trade-off.”

Binance Launches New Token Distribution

Binance announced on Sunday that it will list ZK on June 17. The exchange also revealed that it will offer a ZK token distribution program “in light of ongoing concerns.”

by postBinance will distribute 10.5 million ZK tokens to up to 52,000 users who meet the criteria. The criteria include users who have initiated at least 50 transactions on ZkSync Era between February 2023 and March 2024 and have executed transactions in a seven-month period. Additionally, the billing address cannot have been eligible for a ZK Nation airdrop.

According to data from CoinGecko, the ZK token opened at $0.3 and reached $0.32. Over the next few hours, the price dropped back to the $0.24 range, down 21% from the opening price. However, the token has a market cap of $900 billion and a fully diluted value (FDV) of $5.1 billion.

The initial performance has received mixed reactions from the community. Some users pointed out that customer dissatisfaction could be part of the reason for the price drop. “In projects, it’s easy to forget that customer satisfaction is crucial to the success of any product or innovation.” Said One X user.

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Ultimately, many users are unfazed by the price drop due to the overall market performance and airdrop recipients selling their tokens. Consider ZK is undervalued and represents a “great long-term opportunity.”

Ethereum is trading at $3,524 on the 5-day chart. Source: ETHUSDT Trading View

Featured image from Unsplash.com, chart from TradingView.com

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